San Pablo Balances $73M Budget Without Layoffs, Scraps Rent Registry

The San Pablo City Council spent most of its June 1 meeting navigating a $4.4 million structural deficit driven by flat casino revenue — and emerged with a balanced two-year budget that avoids layoffs for the 12th consecutive year. But the fiscal pressures aren't going away: staff warned that without new revenue from cannabis retail, a potential sales tax measure, and other sources, staffing cuts could be on the table within two years. Elsewhere, the council split on tenant protections and a Pride flag, producing two 4-1 votes that exposed fault lines on housing policy and civic symbolism.

• Council advances balanced two-year budget that closes a $4.4M deficit through $2.4M in cost cuts and $2M in reserves — no layoffs
• Rent registry repealed 4-1 over Councilmember Pineda's objection; city pivots to a mediation-based rent review program with a volunteer board
• Pride flag approved for all of June at City Hall, 4-1, expanding an eight-year one-day tradition; Mayor Pabon-Alvarado dissents
• $61M in capital projects move forward, including a 100-year-old bridge replacement with a $12M funding gap
• Vice Mayor Xavier secures $3.7M in regional transportation funds for the San Pablo Dam Road interchange

---

Closing a $4.4M Gap: The Budget Math

The council unanimously directed City Manager Matt Rodriguez to prepare final budget adoption resolutions for the June 15 consent calendar, setting the city's fiscal course for two years beginning July 1.

Why it matters: Casino revenue — which funds roughly 59% of San Pablo's general fund — has been flat or declining for four consecutive fiscal years. Administrative Services Director Arturo Castillo told the council that the shortfall has averaged $837,000 per year. Layer on a $1 million increase in CalPERS unfunded actuarial liability costs, rising insurance premiums, and utility expenses, and the city entered budget season staring down a $4.4 million hole.

Where things stand: Staff closed the gap without reaching Tier 4 — the layoff tier — using a methodical approach. Tier 1 froze unfilled positions. Tier 2 tapped $2 million in operating reserves. Tier 3 trimmed contracts and non-essential services. The result: total general fund revenues of approximately $56.9 million against expenditures of $73.2 million (including special revenue funds), with the city retaining roughly $51 million in operating reserves and a AA-minus credit rating.

The cuts were real but targeted. Police overtime and part-time staffing were reduced. Summer camp was shortened from nine to eight weeks. Teen lounge hours were cut. A secondary preschool site had already been closed. IT services were consolidated citywide.

"Staff's been working on providing information through our social media networks to our community about our upcoming fiscal condition, including the staff's efforts over a very compelling budget cycle to reduce a forecasted $4.4 million deficit, which has been eliminated to zero," said City Manager Matt Rodriguez.

The other side: Mayor Elizabeth Pabon-Alvarado questioned whether the city's reserves — well above the 20–50% range she cited as typical for AA-rated cities — were unnecessarily high, and whether pursuing a sales tax increase was appropriate given current economic conditions. "Most cities that have a AA rating, their reserves is at 50 to 20% max. We're way, way above that," she said.

Rodriguez pushed back, warning that reserves are one-time funds that cannot sustainably cover ongoing costs — and that credit rating agencies scrutinize how cities deploy them. He was blunt about the stakes: "If we don't support all of the new revenue mechanisms that we've been bringing forward for the council to review and implement and our casino revenue continues to decline or flattens out, we have to start looking at that Tier 4 budget reduction measure."

Councilmember Abel Pineda zeroed in on youth services, flagging a 25% cut to Beacon School programs. "I saw that 25% cut for the Beacon School programs and I think from my understanding it's not necessarily that our site is funded but we're not receiving or the district still is not sure what they're able to contribute," he said, urging that the San Pablo Youth Scholarship Program and Beacon Schools be protected.

Revenue pipeline: Four mechanisms are in various stages of development: an updated master fee schedule already generating $200,000–$400,000; three commercial cannabis retailers that could eventually produce $2.2 million annually; a proposed half-cent sales tax measure being polled for a potential November 2026 ballot (requiring a four-fifths council vote at a July 13 special meeting); and a new police training center expected to bring in $200,000–$400,000. Net new revenue could reach $3–4 million annually once Measure S steps down from $2 million to $1 million in October 2027.

What's next: Final budget adoption resolutions go to the June 15 consent calendar. The new fiscal year begins July 1. The city is also transitioning to priority-based budgeting for FY 2028-29 and has contracted NHA Advisors to evaluate the health of its reserves.

Decisions: Passed 5-0. (For: Councilmember Cruz, Councilmember Ponce, Councilmember Pineda, Vice Mayor Xavier, Mayor Pabon-Alvarado.)

---

$61M in Capital Projects, and a 100-Year-Old Bridge

As part of the budget hearing, Senior Civil Engineer Matt Brown presented a capital improvement program spanning 17 active projects totaling $61 million — an ambitious portfolio for a small city managed by just four project managers.

The basics: Grant funding covers 49% of the CIP, with 25% still unfunded. Less than 10% comes from the general fund.

Where things stand: The highest-profile project is the San Pablo Avenue bridge replacement — a century-old structure at a complicated five-road intersection with a $12 million funding gap the city is aggressively working to close through grants, including a $4 million California Natural Resources Agency grant approved on the consent calendar. McNeil Park recently received a half-million-dollar grant but still has a $3 million gap. Other active projects include the Giant Road bridge repair (out to bid), Rumrill Sports Park turf replacement, I-80 Gateway sidewalk improvements, a Contra Costa Mobility Hub near the community college, and Broadway/El Portal cycle tracks with a school traffic safety education component.

The department has won multiple awards — APWA national, CASQA state, California League of Cities, and Chrysalis honors — for the Rumrill Complete Streets project.

Vice Mayor Rita Xavier reported that the West Contra Costa Transportation Advisory Committee unanimously approved $3.672 million in sub-regional transportation mitigation program funds for San Pablo Dam Road interchange Phase 2. "We voted to give $3,672,000 in STMP funds to the San Pablo Dam Road interchange project, Phase 2. The city of San Pablo contributed 328,000 for a total of $4 million," she said.

---

Rent Registry Scrapped, Tenant Mediation Board on the Way

In one of the night's sharpest debates, the council voted 4-1 to repeal its rent registry ordinance and replace it with a rent review program — a move that Councilmember Pineda fought to block.

The basics: San Pablo's Rent Registry, codified in Chapter 9.60 and administered by HDL, has been in effect since summer 2024. It requires landlords to register rental units and report rent levels. A rent review program, by contrast, creates a volunteer mediation board to hear tenant complaints about excessive rent increases.

Why it matters: The registry achieved only 67% compliance, produced data that was collected annually and became stale quickly, caused confusion with other city programs, and lacked meaningful enforcement. Economic Development and Housing Manager Karen Slaughter told the council the program failed to deliver for either side: "At the crux of the issue is there just really wasn't an opportunity to identify a really true benefit, not only to the tenants, but the housing providers."

Staff convened stakeholders — including Echo Housing, the California Apartment Association, and community members — to develop the replacement. A mobile home tenant workshop was recently held at Maple Hall. The proposed rent review program would establish a five-member volunteer board (two housing providers, two tenants, one neutral member appointed by the council) to mediate rent increases exceeding a threshold, possibly 5–7% per 12 months.

The other side: Pineda made an extended case for keeping and strengthening the registry rather than eliminating it. He argued it should include penalties for non-compliance, know-your-rights documentation requirements, and triggers for mediation when rent increases exceed legal limits. He made a substitute motion to retain and enhance the program, but it failed for lack of a second.

City Manager Rodriguez explained the resource constraint plainly: the city cannot administer both programs simultaneously. "Rent registry was good for the moment, but what Council Member Pineda is proposing is to expand the scope to also require us to do a fiscal impact analysis," he said, adding that rent review offers more meaningful tenant protections.

Decisions: Vice Mayor Xavier moved to waive first reading and introduce the repeal ordinance. Passed 4-1. (For: Councilmember Cruz, Councilmember Ponce, Vice Mayor Xavier, Mayor Pabon-Alvarado. Against: Councilmember Pineda.) Second reading goes to the June 15 consent calendar.

---

Pride Flag Expands to Full Month, Mayor Dissents

The council voted 4-1 to fly the Pride flag at City Hall for all of June 2026 — expanding what had been a single-day display for the past eight years.

Three public speakers supported the request. Jamie Purcell, chair of Richmond Rainbow Pride, cited 2024 as one of the most dangerous years for anti-LGBTQ hate crimes and referenced 500 to 800 anti-LGBTQ legislative proposals filed nationwide. Genevieve Calloway noted that Downer Elementary School teacher Joy Alexander was leading a Pride Spirit Week with students. Anna Villalobos, a 55-year San Pablo resident, argued that the flag establishes the city as inclusive and welcoming.

Councilmembers Cruz, Ponce, and Pineda all voiced support. Mayor Pabon-Alvarado delivered an extended statement explaining her dissent, listing Elder Abuse Awareness Month, foster youth, veterans, and individuals with disabilities as groups she felt equally deserved recognition. "My concern is that when government chooses to officially highlight one cause, it can unintentionally leave others feeling overlooked," she said.

Decisions: Motion by Vice Mayor Xavier, seconded by Councilmember Pineda. Passed 4-1. (Against: Mayor Pabon-Alvarado.)

---

Minor Items

• Consent calendar approved 5-0, including Citizens Oversight Committee compliance statements confirming proper expenditure of Measure K and Measure S funds for FY 2024-25, and a $4 million CNRA grant for the San Pablo Avenue bridge replacement.
• AB 2561 staffing report: HR and Risk Manager Alicia Platt reported 7 of 10 city vacancies filled since December 2025, with no bargaining unit exceeding the 20% vacancy threshold. The city's two hiring freezes have been lifted. Three vacancies remain: Senior Building Inspector, Senior Public Works Inspector (to be reallocated to an Engineering Technician), and an Assistant Planner that will not be filled. Average time to fill a vacancy: 80 days. About 60% of employees have exceeded the median longevity for local government workers.
• Earth Team presentation: Richmond High School interns presented their EPA-funded Participatory Science Networks for a Trash Free Bay project. Over two years, 50 students conducted 144 on-land visual trash assessments, removed approximately 2,000 pounds of litter, and identified plastic as the leading pollutant (3,400 items). The State Water Board has reached out to explore scaling the model statewide. The project is funded through a $33,000 EPA grant allocation and a $377,000 Caltrans Community Cleanup and Employment Pathway Grant.
• City Manager announcements: Election day reminders, community dumpster day, and summer programming events.